Types of Expenses

Front

What is a variable expense?

Back

A variable expense is a cost that can change from month to month, such as groceries or entertainment.

Front

Give an example of a variable expense.

Back

Groceries.

Front

What is a fixed expense?

Back

A fixed expense is a cost that remains the same each month, such as rent or a loan payment.

Front

Give an example of a fixed expense.

Back

Student Loan.

Front

What is a discretionary expense?

Back

A discretionary expense is a non-essential cost that can be adjusted or eliminated, such as dining out or subscriptions.

Front

Give an example of a discretionary expense.

Back

Netflix subscription.

Front

What is the difference between fixed and variable expenses?

Back

Fixed expenses remain constant, while variable expenses fluctuate based on usage or consumption.

Front

What are some common examples of variable expenses?

Back

Groceries, utility bills, and entertainment costs.

Front

What are some common examples of fixed expenses?

Back

Rent, mortgage payments, and insurance premiums.

Front

How can understanding expenses help in budgeting?

Back

Understanding expenses helps individuals allocate their income effectively and prioritize spending.